ADP Just Raised Its Dividend 10% for the 50th Year in a Row
Automatic Data Processing (NASDAQ:ADP | ADP Price Prediction) just raised its quarterly dividend by 10%, marking the company’s 50th consecutive year of dividend increases. That puts ADP in Dividend King territory, an elite group of fewer than 50 companies with…
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Automatic Data Processing (NASDAQ:ADP | ADP Price Prediction) just raised its quarterly dividend by 10%, marking the company’s 50th consecutive year of dividend increases. That puts ADP in Dividend King territory, an elite group of fewer than 50 companies with half a century of uninterrupted dividend growth. For retirees and income investors, this is the kind of track record that matters.
A 50-Year Dividend Growth Machine
ADP’s quarterly dividend now sits at $1.70 per share, up from $1.54, translating to an annual run rate of $6.80 and a yield of roughly 3.0%.
The compounding effect is striking. In 1999, ADP’s annual dividend was just $0.305. Today it’s $6.80, a 2,128% increase over 27 years, representing a compound annual growth rate of approximately 12.5%. Over the past five years, the dividend has grown at a 12% annual clip.
| Period | Annual Dividend | Growth |
|---|---|---|
| 2026 | $6.80 | +10% |
| 2025 | $6.16 | +10% |
| 2024 | $5.60 | +12% |
| 2023 | $5.00 | +20% |
What Income Investors Need to Know
ADP’s business model is recession-resistant. The company processes payroll for over 1.1 million clients across 140+ countries. Payroll is not optional, giving ADP a remarkably stable revenue base.
The dividend has grown through the 2008 financial crisis, the 2020 pandemic, and every downturn in between. With inflation running at 2.2% year over year, ADP’s 12% five-year dividend growth rate provides meaningful purchasing power protection retirees need.
The Dividend Is Safe
ADP generated $4.8 billion in free cash flow in fiscal 2025, against $2.4 billion in dividend payments – a free cash flow payout ratio of 50.3%, well below the 70% threshold considered elevated. The dividend was covered 1.99 times from free cash flow.
On an earnings basis, the payout ratio sits at approximately 61% based on trailing twelve-month EPS of $10.41 and an annual dividend of $6.32. Both metrics leave room for continued dividend growth. Recent quarters show adjusted EBIT margins expanding to 26.0%, up 80 basis points year over year.
The Bottom Line for Income Investors
Dividend Safety Rating: Very Safe
The combination of a 50-year dividend growth streak, a sustainable payout ratio, and a recession-resistant business model places ADP among the more established dividend payers in the market. The 3% yield is modest, but the consistency and growth history are factors income-focused investors and retirees often research when evaluating dividend stocks.
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Jordan specializes in a wealth of finance topics, ranging from traditional equities, income investment vehicles and alternative assets to retirement savings, debt-based fixed-income securities and commodities, with a specific focus on gold and other precious metals. He takes pride in combining his personal interests and professional experience in finance and education to help readers increase their financial literacy and make better investment choices. Jordan has worked in digital publishing for 17 years after graduating from Lynn University as a member of both the Kappa Delta Pi International Honor Society and the U.S. Achievement Academy's All-American Scholar Program. He is the investing and banking editor for Money and previously served as managing editor of Weiss Ratings. As a contributing writer for BetterInvesting Magazine, Jordan covered topics focused on the fundamentals of investing, technical and fundamental analysis, mutual funds, debt securities, dividend investing, retirement savings strategies and passive income generation. His bylines can be seen at Nasdaq.com, Apple News, Money, MSN, BetterInvesting Magazine, Money Crashers, TipRanks, the Miami Herald and a dozen other newspapers.
